November 17-23, 2019, marks Education Savings Week, a nationally recognized week dedicated to encouraging Canadians to start saving early for a child’s post-secondary education.
Canada’s future economic prosperity will depend on today’s youth, so it is crucial that they receive the education and experience they need to prepare for the jobs of tomorrow. For that reason, the Government of Canada offers a number of education savings incentives to make post-secondary education more affordable for more Canadians.
Anyone can open an RESP to save for a child’s education after high school: a parent, a grandparent, a family friend, a foster parent or a public primary caregiver.
Families can benefit from thousands of dollars in savings incentives from the Government, and it all starts with opening up a Registered Education Savings Plan (RESP). When an RESP is opened for a child, the Government of Canada tops up savings through the Canada Education Savings Grant. In addition, through the Canada Learning Bond, families may qualify to receive money in their child’s RESP with no personal contribution required.
RESPs allow education savings to grow tax-free. They are the only savings account that attracts Government of Canada education savings incentives, namely:
The Canada Learning Bond, which provides up to $2,000 in an RESP for eligible children from low-income families, born in 2004 or later up to the age of 15, with no personal contributions required.
The Canada Education Savings Grant, which adds between 20 and 40 percent of personal contributions to an RESP for all eligible children, depending on family income and the amount contributed.
The money saved in an RESP is not just for tuition; it can also be used for other expenses including books, tools, rent, and transportation according to the Government of Canada.